Capita may face Arch cru loss
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Capita has prepared its shareholders for the possibility that the firm will have to pay costs as a result of the Arch cru suspended funds’ debacle.
In a Stock Exchange statement last week, Capita said it is working with the FSA, Arch, the depositories to the funds and other parties to resolve the suspension of the funds and provide shareholders with further information regarding the current value and future prospects of the funds.
The funds were suspended in March this year following high redemptions at a time when the underlying assets were illiquid.
Capita says: “In our half-year statement, we referred to the work we are undertaking to resolve the suspension of two Oeic investment funds for which CFM is the authorised corporate director. These two funds were affected by high redemptions at a time of unprecedented market illiquidity after the collapse of Lehman Brothers. In conjunction with the delegated investment manager, Arch Financial Products, and with the agreement of the depositaries, CFM suspended dealing in the two funds on March 13, 2009.
“There is the possibility of investors having suffered detriment and we are also considering with the FSA and other parties what action may need to be taken to remedy any such detriment. Any material costs incurred by Capita in resolving this matter will be disclosed separately from the group’s underlying profit in our accounts for the year ended December 31, 2009.”
Capita says most of its business is performing well and not exposed to particularly vulnerable sectors but it is suffering from rising IT costs and the increasing burden of regulatory compliance.
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